Higher raises in the works with NC House budget due out in August

The state legislature’s budget summer will take the next step in August, when the House releases its spending and tax proposal that will include higher raises for state employees than what the Senate wants.

North Carolina has a sunny revenue forecast, billions of dollars more than expected in upcoming tax collections and possibly enough money to satisfy many of the goals of Republicans and Democrats in the budget.

Both House Speaker Tim Moore and head budget writer Rep. Jason Saine told The News & Observer Wednesday — two weeks after the date a new budget normally kicks in — that they hope to get their proposed budget out in early August. They would then spend at least a few weeks working on the final budget, which is called the conference budget, with the Senate. That means the Republican-led General Assembly could pass a budget to send to Democratic Gov. Roy Cooper’s desk by the end of August.

Raises and capital projects in House budget

Saine, a Lincolnton Republican, chairs the powerful Appropriations Committee.

Republicans, who control both chambers, will take a break for most of the last week of July to attend the American Legislative Exchange Council conference where conservative legislators share policy ideas and model legislation. Saine said the House budget chairs plan to give their documents to the legislature’s bill drafting staff to work on while they are gone.

The legislature came back this week after a weeklong break over the Fourth of July holiday, and House budget leaders figured out when they will be ready to present their budget to the public. The last target date was the third week of July, but now the goalposts have moved to the first week in August.

Once the budget is ready, the House plans to roll it out and vote on it all within a week.

Saine wouldn’t say exactly how much those state employee and teacher raises will be. Both he and Moore told The N&O the raises will be higher than those in the Senate budget that gives an across the board 3% raise to all state employees and a 3% average raise to teachers, along with bonuses.

Saine said the Senate’s budget is “bare bones” for a lot of things, particularly raises.

But despite suggesting the Senate budget is austere, House leaders don’t plan to spend more overall on the ongoing operations of state government. The chambers already agreed on a total spending amount of $25.72 billion for 2021-22 and $26.7 billion for 2022-23.

Instead, they could shift funding to different areas, or spend more money on capital projects. “We’re looking at higher raises, we’re looking at more spending, particularly in the capital side,” Moore, a Kings Mountain Republican, told The N&O in an interview.

“I’m going to fight to get the UNC [Kenan-Flagler] School of Business included ... I’m gonna fight for the School of Nursing,” Moore said.

Working with Gov. Cooper

Republican House and Senate leaders, as well as Democratic Gov. Roy Cooper, have all said they wanted to work together better this time for a state budget. In 2019, Cooper vetoed the budget. The House overrode it but the Senate did not, and instead a series of smaller budget bills were passed. The state has a longstanding continuing resolution that maintains spending levels from previous years until a new budget becomes law.

The Senate passed its budget in late June with a veto-proof majority, but the four Democrats who voted for it then might not again if it comes to an override vote. But before it even gets to Cooper’s desk, the House has to pass its own budget and then the final joint budget bill.

Saine said that the governor’s office has had a “considerable amount of input” on the budget process this year.

“They’re pragmatic, they know they’re not going to get everything they want, too,” he said. Saine said part of the reason House members are not rushing through the budget is because they want to take enough time to work out a final agreement during the conference process before it goes to Cooper to take action.

“I’m still very hopeful that we can get an agreement. It doesn’t mean that the governor’s not going to veto the budget, he might. But if we can prevent that in the meantime when we’re in conference, when we’re working together, then that would be the best of all worlds,” Saine said.

Sticking points on the budget between the chambers as well as Cooper are likely to be the amount of raises and tax cuts. Saine said that the House questions the Senate’s tax plan beyond the next two years. The Senate’s budget completely phases out the corporate income tax.

A big part of the 2019 budget battle was Medicaid expansion. Cooper wants it; Republicans don’t. When the chambers first announced their spending agreement earlier this summer, they also said Medicaid expansion won’t be in the budget. But a Cooper spokesperson said that expansion is not off the table in budget negotiations.

“We’ve been very clear,” Saine said. “I really don’t think that’s in the cards. But it’s been something he’s fought for, and I can appreciate that. But you don’t have the numbers to do it.”

That doesn’t mean Republicans won’t take up Medicaid expansion talks outside of the budget.

“[Cooper] can want it, not get it, and still fight for it another day and still fund some of the priorities that he’s got,” Saine said.

Saine already expects the House to concede some budget priorities with the Senate. The conference budget process will take about two weeks, he expects.

Assuming nothing is derailed — though things often are in state politics — North Carolina could have a new state budget before Labor Day.

For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at link.chtbl.com/underthedomenc or wherever you get your podcasts.